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Marcello M. Mariani, PhD Ph.D. Business Administration (May 13, 2005) Department of Management, University of Bologna, Italy Visiting Fellow (2004) H. John Heinz III School of Public Policy and Management & Tepper School of Business, Carnegie Mellon University, Pittsburgh, USA B.A. Economics and Finance - (December 13, 2001) Final grade: 110/110 cum laude Thesis Title: “Stock abnormal returns around the ex-dividend day. Empirical evidence from the Milan Stock Exchange” Faculty of Business & Economics, University of Bologna, Italy High School Diploma Maturita’ Scientifica - July 1997 Final grade: 60/60 cum laude Scientific High School, Liceo Scientifico “E.Fermi”, Bologna, Italy.
HONORS 2005-2006 2005 Endeavour Australia Postdoctoral Research Fellowship, Department of Education, Science and Training, Australian Government 2006 Marco Polo Fellowship for Young Post-Doc Researchers, University of Bologna (Ninth Edition) 2005 Marco Polo Fellowship for Young Post-Doc Researchers, University of Bologna (Eighth Edition) 2005 Grant for the attendance of the 2005 IRI Summer School in Managament on the topic “A Neo-Carnegie Approach to Organization and Strategy Research” 2004-2006 Fellow (Assegnista di Ricerca) for the Research Project on “Managerial Processes and practices for Cultural Organizations”, University of Bologna 2004-2005 Included in the short list of meritorious applicants for IRI US Research Fellowships. 2004 Marco Polo Fellowship for Young Researchers, University of Bologna (Fifth Edition) 2002-2004 Fellow (Assegnista di Ricerca) for the Research Project on “Managerial Processes and Management Accounting for Cultural Organizations”, University of Bologna 2002-2003 Fellow for the Research on the normative transformation of Italian Enti Lirici into foundations by private law. PH.D. DISSERTATION "Make or buy? Different ways of Orchestrating Production Processes and Organizational Innovation. Evidence from Italian Opera Houses" Advisor: Luca Zan Committee: Cristina Boari, Mariarita Tagliaventi, Maurizio Sobrero (PhD Coordinator) At any given time, there is a balance between what an organization makes internally and what it buys. Management frequently must re-examine whether this equilibrium is the most appropriate one. A core strategy question is linked to this issue: how established organizations survive and sustain their competitive advantage through outsourcing decisions? The question appears even more crucial if we consider contract-out decisions concerning core production processes which involve skilled professionals in knowledge-intensive organizations. This study addresses the aforementioned question by considering, as empirical setting, a relevant portion of the Italian Opera House cultural industry (namely the 13 Big Opera Houses - Fondazioni Lirico-Sinfoniche - and 4 minor Opera theatres – Teatri di tradizione) over the time period 1999-2003. First a characterization of the structure of costs and revenues for the considered organizations is carried out. After recognizing the cost of personnel as the most significant expense item for the industry (it represents almost 50-60% of total costs for the considered sample of organizations), artistic human resources and music ensembles are addressed as key pivotal factors influencing the chance of the individual organization to survive and succeed. Second, an insight on production processes is proposed, by introducing the concept of Time to Premiere (T2P) as a significant measure to understand benefits and drawbacks of either sharing artistic ensembles and/or contracting them out. As evident from an in-depth case study led on a consortium of co-producing minor theatres belonging to the observed organizations, partnerships can improve efficiency in managing artistic ensembles, especially when they involve small theatres, geographically close to each other, and interested in sharing artistic ensembles. Nonetheless, a significant pitfall of co-producing arrangements could be the loss of artistic and organizational identity for the individual Opera House participating in the alliance. Third the concept of coopetitive artistic value chain, contemplating both cooperation in the producing activity and competition in the presenting one, is illustrated as possible solution for the aforementioned trade-off opposing economic benefits to artistic drawbacks.
CONFERENCE PRESENTATIONS AND PROCEEDINGS
This research project aims at exploring and describing the most significant current economic trends and issues in the European live classical music sector , linking them to extant cultural policies in selected European countries. Particular attention will be addressed not only to actual trends, but also to the way relevant cultural policy makers and LCMOs managers perceive the current situation. More specifically three objectives are pursued with this project
As mentioned before, a specific attention will be devoted to the perceptions of (1) funding problems, (2) corporate governance effectiveness, (3) organizational innovations on behalf of relevant cultural policy makers and LCMOs managers. This focus on perceptions is somehow a necessary condition to explore the perceived needs of LCMOs, which do not necessarily emerge from a mere analysis of actual trends and figures. There are at least three reasons why this project seems particularly important: 1) The transformation of the public sector in many countries and the crisis of the welfare state in Europe are pushing towards the privatization or “quasi-privatization” of LCMOs. This is happening in countries where performing arts have been traditionally supported by the state over the last century (e.g., the major Italian Opera Houses, called Fondazioni Lirico-Sinfoniche, have been funded by the state since the twenties of the last century). Therefore it is important to understand if and to what extent the privatization of LCMOs has actually affected their financial, corporate governance and organizational structures. 2) The state of financial crisis and distress involving many LCMOs regardless of the fact that they have undergone a process of privatization. 3) The need for a policy maker’s reflection on the emergence of interesting organizational innovations at the organizational level. In more detail, experimentations in the division of labour between presenting and producing houses have been carried out by several organizations (such as the Mahler Chamber Orchestra or the Consorzio dei teatri di Livorno, Lucca e Pisa). Finally this project is particularly innovative since it focuses not only on actual trends but also on the perceptions of both relevant cultural policy makers and LCMOs’ managers as regards cultural policy making and its impact on the 3 analyzed dimensions (financial structure, corporate governance structure, organizational structure).
Economics and management of performing arts organizations have recently gained importance especially in those countries with a rich cultural tradition. This is even truer in the continental European live classical music industry wherein poor funding for music institutions has imposed severe budget constraints and pushed them to seek financial interventions of foundations, private investors and commercial sponsors. The overall ongoing process of privatization for European LCMOs is attracting the attention of economists and management scholars, as well as that of policy makers and policy making researchers. Indeed national European governments have traditionally played a fundamental (even not an irreplaceable) role in supporting financially LCMOs in the past . Nonetheless this role has been seriously questioned as a consequence of the shrinkage of governments’ budgets for cultural organizations and as a result of the privatization wave that has involved a significant number of these organizations. Consequently in this delicate phase of transition, it seems crucial to generate a critical mass of research in the economic, management and policy making field, with a possible cross-fertilization between disciplines. As far as policy making investigations are concerned, extant cultural policy investigations at the European level have dealt with LCMOs not in a specific way, looking at them as a “portion” of the cultural industry. An evident example of this point is represented by the “Compendium of Cultural Policies and Trends in Europe” by the Council of Europe/ERICarts (2006), which is physiologically referred to the cultural industry as a whole and does not specifically addresses the LCMO sector and the specific impact of cultural policies on individual organizations. This research project tries to bridge this research gap by providing interesting insights on the sector that could be relevant for European countries national policy making and that could be incorporated in wider policy programs at a European level.
Summary This research project aims at exploring and describing the most significant current economic trends and issues in the European live classical music sector, linking them to extant cultural policies in selected European countries. In more detail an international comparison will be conducted in order to analyze financial, corporate governance and organizational structures of a significant sample of European Live Classical Music Organizations (LCMOs). The innovativeness of this project rests on the fact that the issues concerning financial, corporate governance and organizational structures for LCMOs will be analyzed not only looking at the actual structures, but also investigating the perceptions of relevant actor in the industry about the current situation of those structures and their future development. Background Economics and management of performing arts organizations have recently gained importance especially in those countries with a rich cultural tradition (Zan, 2006; Mariani, 2005). This is even truer in the continental European live classical music industry wherein poor funding for music institutions has imposed severe budget constraints and pushed them to seek financial interventions of foundations, private investors and commercial sponsors (Sicca & Zan, 2005). The overall ongoing process of privatization for European LCMOs is attracting the attention of economists and management scholars, as well as that of policy making researchers. Several economic studies have dealt with cultural and creative industries in general so far. Economists have contended with the economic rationale for state financial support in the performing arts often recalling issues of scarce productivity and of “cost disease” (Baumol & Baumol, 1985b; Throsby, 1996). According to this view, performing arts organizations have been traditionally depicted as intrinsically inefficient and condemned to perish due to their explosive cost structure (Baumol & Bowen, 1965; 1966; 1985a; 1985b). Even if the so called Baumol disease has been criticized (Netzer, 1978; Peacock et al., 1983; Schwarz, 1987; Singer, 1987; Felton, 1994; Kesenne, 1994), cultural economics and management literature have examined on one hand the impact of public subsidies on repertoire innovations (Martorella, 1997; Heilbrun, 2001; Pierce, 2000; O’Hagan & Neligan, 2002) and on the other the effect of costs increase for performing arts (Baumol & Baumol, 1985b; Throsby, 1996). Impact studies have been examining the economic impact (i.e., on income, employment consumption, etc.) of an individual cultural event on the cultural life of a city, a region, and entire nation (Cwi-Lyall, 1977; Myerscough, 1988a; Kummel-Berger, 1988). Cultural policy studies have scrutinized a huge variety of issues concerning performing arts and the role of cultural policy makers. Corporate governance structures of performing arts organizations have been studied by Hansmann (1997) and Towse (1997). Globermann e Book (1974) dealt with statistic cost functions for performing arts organizations. Moore (1968) analyzed the economic characteristics of American theatres, Kurabayashi and Matsuda (1988) studied social and economic aspects of symphonic orchestras and opera houses in Japan. Krebs and Pommerhene (1995) investigated the politico-economic interactions among German performing arts organizations whereas Schulze and Rose (1998) dealt with financial problems in German public orchestras. Frey (1994) studied the economic characteristics of music festivals. Rosenbaum (1967) analyzed the financial evolution of symphonies in the US. O’Brien e Feist (1995) conducted a study on employment in the artistic industry in England since 1991. Felton dealt with demand for perfoming arts (1992), with the construction of a model for Opera ticket demand (1989). Throsby (1990) and Urrutiaguer (2002) investigated the perception of quality for the theatre. Management scholars have started investigating performing arts organizations in the eighties (Sicca, 1998) with a focus on organizational (Weick, 1988; Argano, 1997; Sicca, 1997; Anand & Paterson, 2000; Glynn, 2000; Lampel et al., 2000; Sicca, 2000b; Hackman, ), strategic (Zan, 1998; Baggioni, 2000; Voss et al., 2000), marketing (Becker, 1982; Nantel e Colbert, 1992; Pick e Anderton, 1996; Scheff e Kotler, 1996; Colbert et al., 1998; Valdani e Botti, 1999; Botti, 2000), and performance measurement (Baggioni, 2000; Gilhespy, 1999; Gilhespy, 2001; Llewellyn, 1996; Mariani, 2004; Nova, 2003) aspects. National European governments have traditionally played a fundamental (even not an irreplaceable) role in supporting financially LCMOs in the past . Nonetheless this role has been seriously questioned as a consequence of the shrinkage of governments’ budgets for cultural organizations and as a result of the privatization wave that has involved a significant number of these organizations. Consequently in this delicate phase of transition, it seems crucial to generate a critical mass of research in the economic, management and policy making field, with a possible cross-fertilization between disciplines. As far as policy making investigations are concerned, extant cultural policy investigations at the European level have not dealt with LCMOs in a specific way. Rather they have been considered a “portion” of the cultural industry. An interesting example of this point is represented by the “Compendium of Cultural Policies and Trends in Europe” by the Council of Europe/ERICarts (2006): it is physiologically referred to the cultural industry as a whole and does not specifically address the LCMO sector and its main issues. This research project tries to bridge this research gap by providing interesting insights on the sector that could be relevant for European countries national policy making and that could be incorporated in wider policy programs at a European level. Objectives of the policy research This policy research pursues three objectives: 1. First I propose to comparatively analyze the financial structures and funding trends of a large sample of major European Live Classical Music Organizations (opera companies, symphony orchestras) over the last decade (1995-2005), in order to identify similarities, differences, possible recurrent patterns and changes over time. The aim of this first portion of the project is to highlight the main funding issues and the most problematic trends emerging. Indeed a widespread severe reduction of governmental funding for cultural institutions over time constitutes a central problem for LCMOs which are now seeking dependable financial interventions of foundations, investors and other funding bodies (commercial sponsors) in the financing of artistic projects. (Expected results from an inquiry into the trends of financial resources and financial resources breakdown could suggest that the financial structure of European music organizations is getting closer and closer to the American one, with an increasing incidence of private financial resources on total resources). 2. Secondly I intend to illustrate corporate governance structures and institutional forms adopted in the live classical music industry with an overall longitudinal approach over the ten-year period considered. The transformation of the public sector in many countries and the crisis of the welfare state in Europe are pushing towards the privatization or “quasi-privatization” of LCMOs in countries where performing arts have traditionally been supported by the state (e.g., France, Germany, Italy). This shift may not have a parallel impact on boards and governing bodies, and not necessarily could generate more accountable management structures. 3. Last, I plan to describe organizational structures and to explore some of the organizational innovations emerging in the analyzed industry with a particular emphasis on inter-organizational dynamics such as (a) co-production partnerships and arrangements among different LCMOs (e.g., co-production on scenery sets for Opera Houses, sharing of artistic ensembles among different performing arts complexes, etc.); (b) different alternatives of division of labor between producing companies and presenting complexes/venues (i.e., In Europe there is a number of vertically integrated organizations dealing both with production and presentation but there are several cases, such as the Mahler Chamber Orchestra, where the producing company “sells” its product to other organizations such as festivals). This kind of investigation should identify the potential benefits and drawbacks (both in economic and artistic terms) of alternative ways of structuring the artistic value chain with a reflection on issues such as costs behaviours, break-even issues, etc. As mentioned before, a specific attention will be devoted to the perceptions of (1) funding problems, (2) corporate governance effectiveness, (3) organizational innovations on behalf of relevant cultural policy makers and LCMOs managers. This focus on perceptions is somehow a necessary condition to explore the perceived needs of LCMOs, which do not necessarily emerge from a mere analysis of actual trends and figures. The final report should attempt to present several policy recommendations on the basis of the analysis conducted and of the data collected. Research methods In what follows the overall methodology of the project is elucidated in synthesis, by identifying five different sequential operational stages in the overall research design. The five stages are as follows: 1) Identification of the population and construction of the samples of the study. The population is made up by both opera companies and symphony orchestras in selected European countries (the countries could tentatively be France, Germany, Italy, Poland, Sweden, the U.K.: they well represent a significant portion of the spectrum of cultural policies in the EU). Considering 1995 as a reference date, a ranking of the 10 major LCMOs in terms of (a) turnover, (b) total assets, (c) number of employees, (d) number of artistic productions, will be undertaken. Data will be collected from the relevant governmental arts funding bodies/agencies of the selected countries (e.g., Dipartimento dello Spettacolo of the MBAC in Italy) and from existing specific databases (e.g., Annuario dell’Opera EDT for Italian opera companies). Those data will be triangulated with data available in extant cultural policy studies. Consequently 4 samples will be generated according to the aforementioned variables (turnover, total assets, number of employees, number of artistic productions); 2) Description of funding dynamics over the last decade (relying on both funding agencies data and annual reports available) for the organizations belonging to the 4 samples identified in the previous point. A general distinction will be drawn between private versus public financial resources, but either of them will be further broken down into several significant subcomponents (e.g. among public financial resources a distinction will be drawn among state, regional, province, municipality financial support); 3) Portrayal of the corporate governance structures for the sampled organizations. This objective will be pursued through an analysis of the annual reports of each organization. Techniques of social network analysis (and relative specific metrics, such as centrality indexes) may be used in order to capture phenomena related to social capital such as “interlocking directorates” and human capital “migration” from one organization to another (e.g., the “migration effect” involving artistic directors of Italian Opera Houses implies that whenever an artistic director moves from an Opera House to another, he/she tends to bring with him/her all the social ties created in the Opera companies where he/she has been working before). 4) Identification of organizational structures innovations emerging in the analyzed industry with a particular emphasis on inter-organizational dynamics such as (a) co-production partnerships and arrangements among different LCMOs; (b) division of labour between producing companies and presenting complexes. This objective will be pursued through an examination of relevant extant cultural policy studies for each of the selected countries and deploying several of the databases available. 5) Interviews with relevant managers of a few of the selected organizations (tentatively 2 LCMOs per selected country) and with key cultural policy makers of the selected countries. Interviews with managers will be conducted, in order to gain a better understanding of (a) their perception about the actual impact of cultural policies on their respective organizational milieu, (b) the extent to which national cultural policy makers’ guidelines meet the actual needs of their organizations. Interviews with cultural policy makers will be conducted in order to capture their understanding of major points of strength and flaws of cultural policies for LCMOs in their country. Overall, interviews with both relevant policy makers and top management may help in capturing their perception of the current cultural policy trends in place and their current and future impact on individual organizations. Additional note While the units of observation of this research projects are both the sector and the individual Live Classical Music Organizations (LCMOs), the units of analysis are a selected number of European LCMOs (i.e., Opera Houses and Symphony Orchestras). Time-line of the research and policy analysis (1 year) The overall research timeline is illustrated as follows: 1. September-October 2006: Identification of the population and construction of the samples of the study; 2. November-December 2006: Review of the main normative sources for policy making in the sampled countries. 3. January-February 2007: Analysis of the financial structure of selected LCMOs and description of funding dynamics over the last decade 4. March-April 2007: Analysis of the corporate governance structure of selected LCMOs 5. May-June 2007: Analysis of the organizational structure of selected LCMOs 6. January 2007-September 2007: Interviews with relevant managers and policy makers. 7. July 2007: presentation of intermediate results 8. July-September 2007: Final Report write-up 9. September 2007- : Dissemination and presentation of results. Potential for use in public policies (follow-up of the research) This research constitutes a crucial step in the process of thoroughly understanding the real issues facing European LCMOs and can help policy making in accompanying LCMOs through the current process of privatization (or quasi-privatization) which is involving them. On the basis of (a) the issues emerging from the analysis of financial, corporate governance and organizational structures, and (b) the needs emerging from the interviews realized with relevant cultural policy makers and managers, several policy recommendations (particularly useful for European cultural policy bodies) could be drafted. These recommendations could be incorporated in the final report. Moreover, on the basis of the results, a questionnaire could be prepared in order to better address the relevant issues analyzed with the research project. This questionnaire could be addressed to all relevant cultural policy makers in EU countries. |
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